You can’t really depend on your vehicle sales department to make a huge profit anymore. Vehicle shoppers are not as easy to find and attract as they used to be because there are more dealers, more franchises, more models and overall more choices than ever before. The result is less traffic in your showroom and more spending on vehicle sales advertising just to put the warm bodies in front of your sales team. Add in the fact that new car grosses are down to nearly nothing and good used cars are getting harder to find and you quickly see a glimpse of your future and the fact is – it isn’t very pretty. But don’t slit your wrists yet. There is hope and it can be an awesome and very profitable salvation. The answer to all of your problems (and this isn’t rocket science), lies in your fixed operations departments. Right there under your nose is a department with the most profit potential, most room for growth and most gross and net per dollar sold – and you walk past it everyday!
Here’s the problem. For some reason most dealers don’t want to get involved in their service department. They know how much they count on and need a successful service operation…but they still don’t do anything to support the cause. Successful dealers in today’s market have got to change the way they think about service if they want to succeed. They have got to realize that the key to success in service is the same as it is in their vehicle sales department – sales! They have to start selling service just like they sell cars – creating opportunities with advertising and maximizing them with sales techniques.
Service managers and advisors (or service salespeople, as I like to call them) have got to start thinking more like sales people if they expect to win this game. They have to be willing to get aggressive and competitive with service offers and they have got to realize that as salespeople, you have to negotiate to get the deal sometimes. They have to start really selling service and they have to push tires if they want to keep their customers from going elsewhere. We’re starting to see that product quality is causing both warranty and customer pay repair work to decline. Maintenance intervals are stretched, which results in less service visits and the competition is on every street corner going after your customers. You need to start running your service department like a service sales department and you need to do it now.
Start here. Hold a weekly Service Sales Meeting with your Service Manager and Service Sales People. Most stores probably have a vehicle sales meeting at least once each week (if not every single day). They are important. They get the sales team pumped up. They get excited, and managers show them how to sell more cars, how to prospect and how to close more deals, right? Dealers and general managers at stores all over the country do this because, quite simply, they know it works.
Most vehicle sales people sell 8-15 cars per month. They probably hold about a 20-25% closing ratio which means they need to see about 50-75 ups or prospective customers each month. Compare these numbers to your service sales people. They come in contact with that many people in just 2 or 3 days, usually writing up about 400-500 customers each month. Wow!
Face it, your service department is a gold mine of opportunity. It is a necessary profit center for your store and it is a key element of the customer relationship and retention process that eventually brings your loyal service customers back for future vehicle purchases. So my question is why don’t you go back there right now and have a good old fashioned pump up, rock and roll, hand out some money & get excited service sales meeting just like you do in your vehicle sales department. Set up a special day and time each week that is your service sales meeting day. Always bring good information to the table like how to identify and overcome objections, how to answer the phone to get more people in and how to assume the sale. Show them how to maximize opportunities. And don’t stop there. Put up a tracking board to track individual and departmental performance. Track customer pay effective labor rate, hours per RO, number of menus sold and missed opportunities. Have them post their numbers daily and watch the improvement that takes place almost automatically. You do this and it works in your vehicle sales department…now do it in your service sales department.
And don’t fall for this one. When I talk to a lot of dealers and general managers about this they try to use the lame excuse that they don’t really know that much about service. They say their area of expertise is in sales – Car Sales. I say this all the same… They are selling service and you are up front selling cars. It is all just selling. They need your guidance on how to sell and how to increase their closing ratios, and you know how to do it. They need to know that you have sales expectations, focused goals and that you require them to sell. They need to know that you are involved and that just taking orders…is not enough. They are paid on commission just like everyone else in your store and would no doubt appreciate you helping them make more money and remember it all goes to your bottom line. Remember, they come in contact with 400-500 of your customers each month! Turn off the auto-pilot and get involved in your service department sales starting now!